Introduction

All six campgrounds are in Tennessee (Exhibit A). Each campground will be operated by one Concessionaire; each Concessionaire may operate more than one campground. In this document, the use of the word concessionaire is understood to potentially mean multiple concessionaires.

Maps are available to show the locations of the campgrounds that the concessionaire will manage.

The Concessionaire will not be allowed to charge for the use of the facilities such as the boat ramp, beach, and public restrooms that are not part of the campground. For clarity, the maps also identify the boundaries of certain day-use areas and other operational areas on the dam reservations for which TVA will maintain complete responsibility and the Concessionaire will not be involved. Table 3 also summarizes the responsibilities and shows the number of facilities.

Term and Termination

The term of each Concessionaire Agreement will be January 1, 2015 through December 31, 2019. The agreement may be terminated by TVA with 60 days’ notice or by the Concessionaire with 180 days’ notice. If TVA terminates an agreement with less than 270 days’ notice, it will pay the Concessionaire according to the following schedule shown in Table 1.

Table 1 - TVA Buyout

Location

Douglas HW

Douglas TW

Cherokee

Pickwick

Melton Hill

Watauga

Buyout
(< 270 days)

$30,000

$20,000

$20,000

$30,000

$30,000

$15,000

If TVA terminates an agreement with 270 days’ notice or longer, no payment will be made to the Concessionaire.

At the end of the five-year term, TVA will determine whether to continue the agreement with the existing Concessionaire, solicit request for proposals, or manage the campgrounds by another method. If the existing Concessionaire is in good standing with TVA, has operated the campground successfully in TVA’s sole opinion, and has made improvements to the camping experience at the respective location in TVA’s sole opinion, TVA may elect at its sole discretion to enter into a new agreement with the existing Concessionaire.

Concessionaire Agreement

A written Concessionaire Agreement, based upon the contents of this Prospectus will be offered to the selected Concessionaire. This Prospectus does not include each and every term or condition that may become a part of the final agreement. Both TVA and the Concessionaire will sign the agreement. The Concessionaire Agreement will not be considered a services or procurement contract.

Payments to TVA by Concessionaire

The selected Concessionaire will not make any rental or fee payments to TVA for the five-year term of the agreement and TVA will not compensate Concessionaire for performance of the Concessionaire Agreement. The Concessionaire will be allowed to retain the revenue generated from the campground(s). TVA will reconsider this arrangement after the first five years. Concessionaire will provide annual statements of revenue and expenses by March 31.

Payments for Utilities

TVA will provide all electricity and water for the campgrounds at no charge to the Concessionaire. There are no wastewater utility fees as the campgrounds do not have sewer service. Concessionaires will be responsible for direct payment for trash disposal (campground), telephone services, internet, television, or other utilities and any fees, deposits, or other costs to establish such other utility services.

TVA will pay for campground trash disposal charges through June 30, 2015, to allow Concessionaire time to establish operations.

Concessionaires are expected to promote conservative use of water and electricity by campers and to work cooperatively with TVA to monitor and manage usage. Additional measures could be required by TVA to reduce wasteful or excessive use of water or electricity.

Annual Improvements by TVA and Concessionaire

The Concessionaire may provide by April 1 of each year a list of potential improvement projects it would like for TVA to consider funding during the following fiscal year (October 1 to September 30). A non-exclusive list of potential improvement projects is included in Appendix A. If funding is available, TVA plans to spend some amount each year at each of the campgrounds and/or associated day-use areas. Table 2 below shows the amount TVA estimates spending each year when funding is available. For the 3 quarters of operation in TVA’s FY15 (January-September), TVA has selected the projects for which the $250,000 of capital and O&M funds will be allocated. As noted above, the concessionaire should submit a list to TVA by April 1, 2015 for proposed FY16 capital and O&M projects. Note these are estimates and not guaranteed and the funding could be spent completely on the associated day-use areas and not the campground, or vice versa. For these improvement projects, if funding is available, TVA will likely handle the construction of the projects, although this is not a requirement.

In a separate category, shown in Table 2, and in addition to the TVA improvement projects discussed above, TVA offers to match each dollar the Concessionaire spends for “concessionaire initiated improvements” up to a maximum amount as shown in the “1:1 Concessionaire Initiated Projects Match” row. This category covers projects the Concessionaire may wish to construct which TVA is not able to or chooses not to fund in any given year. For the 3 quarters of operation in TVA’s FY15, TVA will make available to the concessionaire 75% of the standard year amount. A breakdown of the FY15 amount available at each site is shown in the following list. Concessionaire initiated projects may include such projects as wireless internet, campsite pedestal upgrades, playgrounds, pads for campground store, etc. Reference example list in Appendix A. Portable storage buildings, wash rooms, and Resident Manager housing are not eligible for TVA’s matching funds. These portable items will be removed by Concessionaire at the end of the term. For the Concessionaire initiated projects, the Concessionaire would generally manage and handle the construction of improvements and TVA would reimburse the Concessionaire through a cooperative contract after the expenses were incurred.

* Estimate only and not guaranteed; may be spent on associated day use areas; assumes funding is available within TVA which could actually be $0 in any given year.

All improvements made by TVA or Concessionaire immediately vest in TVA and become an asset of TVA. The Concessionaire would have no claim against any improvements it makes. Concessionaire can remove portable buildings it owns (store, washroom, resident manager housing).

Concessionaire Responsibilities

The selected Concessionaire will completely manage the campground on TVA’s behalf and pay all related operational expenses not specifically excluded in writing in this document or in the Concessionaire Agreement. The responsibilities include:

Mowing grass regularly in campground and associated day-use area.

Trash/Litter pickup and disposal for campground and associated day-use area. Trash/Litter for campground and associated day-use area goes in Concessionaire provided dumpster. Concessionaire will establish their own trash disposal contract directly with a waste management company. If trash disposal charges exceed $6,000 individually for Pickwick or Cherokee or $4,000 individually for Douglas Headwater, Douglas Tailwater, or Melton Hill (Watauga has no associated day-use area), then TVA and Concessionaire will review this issue to determine whether TVA may be willing to pay the excess or handle the trash/litter disposal charges for the associated day-use areas.

Campsite fee collection and refunds if necessary.

Enforcement of length of stay and other campground rules.

Calling TVA Police for any problems in campground or associated day-use area.

Picking up tree limbs and disposal for campground area. TVA will fell any identified danger trees or high limbs, and Concessionaire will cut up tree once on the ground, handle disposal or use as firewood, and clean up the site. TVA will handle all aspects of danger tree removal and cleanup on associated day-use areas.

Providing expendable restrooms supplies at campground (e.g., toilet paper, soap, trash bags, light bulbs, flush valves, all general type items) and installing such items. For the associated day-use areas, TVA will supply a certain amount of expendable items on a routine schedule and the Concessionaire will install as needed. TVA provided supplies should not be used for campground facilities as those are to be provided by Concessionaire. TVA and Concessionaire may need to further refine this arrangement as the term progresses based upon specific site conditions.

Cleaning and stocking restrooms at campground and the public restrooms at the associated day-use areas at least twice daily.

Repair and replacement of toilets, sinks, urinals, faucets, cracked mirrors, partition walls, tiles, doors, ventilation fans, hand dryers, water heaters, and associated pipes, wires, and equipment in the campground restrooms up to $5,000 annually per campground. Replace with similar type fixtures. These items are not eligible for TVA improvement or Concessionaire Match projects as shown in Table 2. Reference also Appendix A. Once Concessionaire provides documents proving that $5,000 has been spent on a campground restroom during one calendar year on the specific items listed above, TVA will assume additional repair and replacement work. Concessionaire will need to coordinate with TVA before spending more than $5000 as TVA may elect to do the work itself or reimburse the Concessionaire for such work. Concessionaire will document and track expenses. TVA will handle and pay for the above items for public restrooms and other facilities on the associated day-use areas. For public restrooms at associated day-use areas, Concessionaires only clean and stock, but do not provide major repairs and replacement of items.

Furnish materials for and repair electrical hookups at individual campsites using licensed electrician. TVA handles any electrical work at associated day-use areas.

Paying for and handling one septic tank(s) pumping per Calendar Year as needed for the campground. TVA would handle additional pumpings if needed and for all septic pumping for the associated day-use areas.

Managing reservations and reservation system if provided by Concessionaire.

Operation of camp store and washroom if provided by Concessionaire.

Maintain a website with information (e.g., campground map, rates, location, contacts, other) about each campground (TVA will work with Concessionaire to properly use TVA logo).

Dewatering lines in the campground as needed during winter/campground closure to prevent freezing. TVA will handle closure of associated day-use areas, if necessary.

Concessionaire will pay for all materials, labor, and equipment associated with its responsibilities under items 1 to 15 above from its revenues (unless excepted above).

Unexpected Closures and Evacuations

TVA will maintain ultimate control of the campgrounds and associated day-use areas. Although unlikely, it is possible that TVA might require a short or an extended closure of all or portions of the campground in any given year for such things as flood control, a perceived threat to nearby TVA facilities, or other unpredictable occurrences. For the period between April 1 and December 31, TVA will make no payment for closures up to 7 days per year per campground. For the 8th day of required closure (either consecutive or intermittent) and successive days, TVA will pay Concessionaire $500 per day per campground up to the maximum buyout listed in the “Term and Termination” section above. During the period from December 15 to March 15, required closure days are not counted toward the 7 days nor is any payment made, and TVA could require closure at its sole discretion indefinitely during this period without any required payment to Concessionaire.

Liability Insurance

The Concessionaire must provide $1,000,000 in commercial general liability insurance per occurrence, with an A.M. Best Rating of “A” or better listing the United States, TVA, its agents, officers, and employees as additional insureds. The Concessionaire will handle, manage, and investigate any claims from the public for such items as damaged recreational vehicle or equipment caused by mowing/maintenance work, limbs falling on camping unit, trips and falls, and similar type claims from public while using the Concessionaire-managed campground area. TVA will handle claims for incidents at the associated day-use areas and not involving the Concessionaire’s activities. If involving Concessionaire’s activities on day-use areas (such as damaged vehicle from mowing), the Concessionaire will handle claims. If a single Concessionaire obtains one or more campgrounds, a single policy meeting the limits above will be sufficient so long as all managed campgrounds are listed on the policy.

Site Descriptions

Table 4 shows a basic summary information about the six campgrounds followed by a written description. Also, see site maps for the individual campground which identify the campsites numbers.

Past Revenue and Utility Cost

Table 5 below shows the revenue TVA has collected for FY11, FY12, and FY13. For all sites, TVA has operated March 15 to November 15, except Douglas Headwater which remained open until December 15. The length of stay has been 21 days for all campsite sites except Cherokee which has 19 long-term sites (long term is all season). (As specified below in the Length-of-Stay Requirements section, this seasonal campground use will not be permitted under the Concessionaire Agreement.) Approximately 60 percent of the campers have received a 50-percent discount from the Golden Age/Golden Access cards

Table 5 - Gross Revenue History

Campground

FY11

FY12

FY13

Pickwick

80,382

107,509

87,672

Melton Hill

99,403

111,298

89,802

Douglas HW

137,601

147,837

145,069

Douglas TW

78,146

99,061

92,423

Cherokee

64,515

70,591

70,969

Watauga

52,790

52,950

36,072*

* Closed part of season due to presence of bears

TVA’s FY13 and FY14 rent structure was as follows:

$10 for tent only sites without hookups

$12 for tent only sites with electric and/or water hookups°

$17 for RV sites without hookups

$22 for RV sites with water and/or electric hookups

$26 for RV sites with water, electric, and sewer service

TVA Utility Cost for the respective cost for the past three years is shown in Table 6.

Table 6 - Campground Utility Expenses

FY12

FY13

Electricity

Water

Garbage

Electricity

Water

Garbage

Pickwick

$20,713

$2,816

*

$21,064

2,956

$ 5,212

Melton Hill

13,159

**

*

10,595

**

1,349

Douglas HW

*

**

*

13,528

**

2,553

Douglas TW

9,594

**

*

9,677

**

2,553

Cherokee

11,816

**

*

12,161

**

5,561

Watauga

#

**

*

#

**

1,758

* data not available; for Douglas HW Electricity was not separated, anticipate near the FY13 amount

** Water combined with other areas and not separated, so specific campground use unknown.

Camping Rates for CY15 and Beyond

In conjunction with using concessionaires to operate the campgrounds, TVA is modifying its campsite rent rates. The campsites, the amenities, and the respective rent rates for each campground are as follows:

The rates may also start to vary by campground in CY16 as some are in higher demand areas than others. The exhibits show TVA’s required rent rates for CY15 and the estimated rent rates for CY16. TVA and the Concessionaire will jointly agree by each November 1 on the rates to be set for the upcoming year. The Concessionaire should publish the new rates at each site and on its website. The rates will be competitive with neighboring commercial and public campgrounds. The Concessionaire should present to TVA by October 1 of each year information on rates for the surrounding commercial and public campgrounds within 50 miles and the proposed rent rates for the upcoming year. The Concessionaire may offer rates less than those shown in the exhibits or special discounts, especially to attract campers during the off season. Tables 7 shows the maximum rent structure for CY15.

Table 7 - Campsite Rent Structure for CY15 ($)

Base

Upgraded Amenities

Electric

Water

Sewer

Waterfront /
Premium

RV sites

14

6

3

2

2

Tent

10

2

1

1

2

Taxes

Because the campgrounds are located on Federal property, the Concessionaire will not collect or pay sales tax on the campsite rentals. Sales tax will be collected and paid by the Concessionaire for any stores, washrooms, or other facilities and paid to the local taxing authority. If sales tax becomes due for the campsite rentals at some future time, the Concessionaire will collect and pay directly to the local taxing authority.

Discount Cards Honored

TVA will require the Concessionaire to honor the Golden Age and Golden Access cards (America The Beautiful Senior Pass and Access Pass) for 50 percent off the base rate (RV or tent site with no utilities) in CY15. The electrical/water/sewer service charge and the premium campsite charge will not be discounted. These rates, with discounts applied, are shown on the Rent Rate Pages. Acceptance of the Golden Age and Golden Access cards will be reevaluated in future years, but Concessionaire should assume they must honor against the base rate for the foreseeable future.

No other discount cards, including the America the Beautiful Annual Pass, are required to be honored.

The Concessionaire may offer other discount programs so long as the final rates do not exceed those shown on the Rent Rate Pages.

Length of Stay Requirements

Off Season (October 1 to April 30): Campers may not occupy a particular campsite for longer than 30 consecutive days. After occupying a campsite for 30 days, the registered camper and camping unit must move to another unoccupied campsite or leave the campground for at least 14 days in order to return to the same campsite. A camper or camping unit cannot reserve another campsite site while occupying a campsite. The camper and camping unit must wait until the day of departure to see if there is a camping site available. It is important that the Concessionaire monitor the length-of-stay requirements and prevent any campers from working around the rules to stay longer than allowed, thereby preventing the general public from camping opportunities. The goal is for the general public to have frequent opportunities to obtain a campsite. TVA prefers a high turnover rate with a lower occupancy rate rather than a relatively low turnover rate with a high occupancy rate.

In Season (May 1 to September 30): Campers may not occupy a particular campsite for longer than 21 consecutive days. After occupying a limited-stay campsite for any amount of time (not to exceed 21 consecutive days), the registered camper and camping unit must leave the campground for at least 14 days. A camper or camping unit can move to any of the other five TVA campgrounds with no wait period.

TVA will consider alternate length-of-stay proposals from Concessionaires that have proven successful and that serve the best interest of the public. TVA does not desire long-term camping at these six campgrounds, but is flexible in how best to offer short-term camping to serve the public and the financial interests of the operation.

Roofs over campers or other areas are not allowed. Decks are generally not allowed, but TVA would consider an application from the Concessionaire for a deck no larger than 336-square feet for sites with difficult terrain so long as many different styles of recreational vehicles could use the campsite/deck. Any approved constructed deck becomes the property of TVA.

Administrative and Environmental Cost for Expansions and Improvements

TVA must approve in advance and in writing all improvements or expansions of the site planned by the Concessionaire. TVA will pay for the reasonable costs of necessary administrative, environmental, and programmatic reviews. If the expenses of the review are deemed to be too high by TVA, then TVA may deny the request. The Concessionaire would then have the option to pay those expenses or a portion of those expenses to cause TVA to continue with the requested review. Any TVA administrative, programmatic, or environmental review costs will be counted toward the 1:1 Concessionaire Initiated Project match maximum for the year (see Table 2).
TVA will also pay all the administrative cost to put the initial Concessionaire Agreement in place.

Application of Herbicides

TVA will be solely responsible for application of herbicides on the campground and associated day-use areas. TVA will apply herbicides up to three times per year to the entire campground and day-use area. The Concessionaire can make suggestions to TVA on the approximate dates to spray and the locations. TVA does not plan to spray “on demand” or just for small isolated areas.